Either “Risk-Off” assets such as bonds reverse lower from resistance, which suggests “Risk-On” assets like stocks break higher, or vice versa.

As of the last few days, the structure has tipped in favor of “Risk Off” assets beginning an early potential reversal, though we’ll need to see price break firmly under their respective rising daily trendlines and 50d EMAs where they stand now.

In other words, while we still could see a bounce higher in bond prices off the 50d EMA (reference early November 2011), further downside price action suggests a high probability for the “Risk-Off” Asset Reversal lower and “Risk-On” Asset Continuation higher thesis.

Though I don’t show it in a separate chart, the S&P 500 broke tentatively above 1,300 and closed the week at 1,320 on a seemingly hesitant (not compellingly impulsive) breakthrough.

The Dow Jones almost completed a full retest of its 2011 high which will be a critical ‘price resistance’ area to watch closely.

For a longer perspective on bond funds, let’s view the monthly structure for IEF:

A quick price-based look shows us a lengthy, overextended rally scraping above the upper Bollinger (volatility) Band near $105.

We can see historically how two similar overextended rallies ended – with a clean retracement back to the rising 20 month EMA (which was a buying opportunity).

So unless the structure changes dramatically with a sudden upsurge in bond prices – and yes that could happen – the simple chart-based odds seem to favor weakness for bond prices, particularly on a trigger under the daily chart trendlines and EMAs shown above.